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Purvin Justifies Decision to Suspend Cuppy's Accreditation

SAN DIEGO (Blue MauMau) - Last night, the American Association of Franchisees and Dealers made the decision to suspend Cuppy's Coffee Accreditation status, awarded last year for having franchise agreements that substantially conform to AAFD's standards. A letter was then sent to CEO and owner Dale Nabors regarding its decision and at 9:30 this morning AAFD chairman Robert Purvin announced their decision on a conference call to franchisees and other interested parties. Originally, the call was to be an exploratory effort in starting a Cuppy's Chapter of the AAFD. But when the call went public and was posted on Blue MauMau, Purvin had no choice but to open it to others and change the agenda of the meeting. In a fairly accurate count, AAFD said there were approximately thirteen people in attendance, but only the three original Cuppy's franchisees invited were on the call.

In talking with Purvin prior to the conference, he said he had no idea what to expect from listeners, but planned to make opening remarks and read the letter sent to Cuppy's. At that point he said he would open the lines to those listening, allowing them to ask questions and give comments. Purvin's introduction and announcement lasted approximately 30 minutes, but the inevitable discussion went on for two hours.

During his opening remarks Purvin said, "I happen to believe that AAFD accredited contracts are an important tool to help us rebalance the franchising industry. And I happen to believe that if we lose accredited contracts or back away it will be a terrific disservice to the franchise community." He said the people who signed the new accredited contract have the closest contract to full compliance that AAFD has ever graded. Purvin feels AAFD has empowered franchisees by making it easy for them to become organized and to move their agenda. To that point he said, "When this call is over I am hopeful that the Cuppy's franchisees that are on the call will seize their opportunity to contact us so we can help them organize into an effective organization that's able to achieve real solutions to the problems they are facing."

But in closing his introductory remarks, Purvin said, "I do want to make a statement to you about the AAFD's investigation of Cuppy's compliance and criteria to retain AAFD's accredited contract status. This has been an investigation that was launched by public scrutiny and information that came to us through various Internet blogs, including Blue MauMau, with who we have collaboration and communication. The bloggers have been free in both their praise and criticism of the efforts of the AAFD. But this issue began with allegations that the second management group of Cuppy's Coffee, more of the Morgan management group, had made contractual commitments to owners, basically in a contract with the lead manufacturing, that there was a rider refund if a franchisee was ultimately turned down for financing. The allegations on the Internet were that many people had been denied those refund claims."

Purvin explained that when they began their investigation they were able to track some 22 refund claims, at that time with the help of the company, and as of May 1, 2008, "we determined that all but four of them had been resolved in a period of six months. Of the remaining four, the company had committed that those were in dispute and under Morg Morgan's management that those matters would be mediated through the AAFD. They also committed that they would subsidize the efforts of the franchisees forming an independent owners association."

"When Dale Nabors took over the company there were statements that those commitments would still be honored, but they have not followed through," Purvin said. "When he brought mediation to Nabors, he and the company ignored the engagement of that mediation. The new management declined to advance its promised subsidy of an owners association and for the past six weeks our telephone and email communications have gone unanswered. "Cuppy's has gone silent on us."

Reporter's note: Stay tuned to Blue MauMau for more coverage on the discussions during the Cuppy's conference call

Related reading:

AAFD Accreditation of Cuppy’s Coffee

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About Janet Sparks

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Public Profile

Janet Sparks is the former publisher of the Continental Franchise Review, an industry newsletter that covered the franchise community for over 30 years. She has also been a columnist for a leading franchise magazine for the past 13 years. Today she is an independent journalist who engages in investigative reporting, tackling complex issues that impact the franchise industry.

Janet can be reached at jsparks@bluemaumau.org or at 303-799-7398.